Expert: Court deals blow to city fracking moratorium

A worker walks by a pump at a fracking station near Dacono during an oil field tour hosted by Anadarko Petroleum Corp. and Coloradans for Responsible Energy Development in this May 19 file photo.
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Coloradoan library
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An almost 30-year-old attempt to ban oil and gas drilling in the city of Greeley could doom several modern efforts as Front Range communities square off against state regulators and the oil and gas industry in court.

Last week, the overturning of Greeley's 1985 ban formed the basis for a Boulder court's dismissal of Longmont's ban of hydraulic fracturing. In the coming months, that Greeley case could also determine four lawsuits seeking to strip other cities of similar ordinances restricting the controversial oil field extraction technique known as fracking, or hydraulic fracturing.

Restrictions passed in Fort Collins, Lafayette, Boulder and Broomfield are "flying in the face" of long-established legal precedent that places power to regulate Colorado's regulation of oil and gas industry with the state, said Jan Laitos, a University of Denver environmental law professor.

Although Longmont's ban was struck July 24 in Boulder County District Court, that decision was put on hold to give the city time to appeal. As of July, a lawsuit filed by the Colorado Oil and Gas Association against Fort Collins' voter-approved moratorium on fracking remained unheard in Larimer County court as the two parties exchanged files.

Aside from the Longmont ruling, fracking restrictions in Fort Collins and other cities face various legal obstacles that could seal their fates, including the wording of Colorado's Constitution.

"The only way cities like Fort Collins, Longmont and Boulder are going to be able to do any kind of banning is if we have a constitutional amendment," Laitos said.

Recent attempts to amend the constitution have failed. After weeks of scrambling, proponents of the so-called "local control" ballot initiative — which sought to grant local jurisdictions power over almost all industrial development — scrapped their petition drive in early July, saying they could not meet their 86,000 signature goal by Aug. 4.

There remain two initiatives vying for spots on the November ballot, and Initiative 89 — an environmental bill of rights backed by Democratic U.S. Sen. Jared Polis — has the potential to change the state's constitution, Laitos thinks.

Until a time such an amendment is passed, Colorado's judges have two major court cases from 1992 — the Greeley case, Voss v. Lundvall Bros. Inc. is one of them — to guide their decisions.

"The cases that are now used by the Longmont judge would not be important if we passed these constitutional amendments," Laitos said.

But amid the snarl of legal constraints facing an outright ban like Longmont's, backers of the Fort Collins ordinance maintain that the five-year moratorium still has a fighting chance in court. Local anti-fracking groups are hopeful that Fort Collins' temporary ban will not run into the same legal obstacles as a permanent ban, said Kelly Giddens with Citizens for a Healthy Fort Collins.

"This changes the case and we still believe we are well within our authority to enact a moratorium," Giddens wrote in an email.

Laitos disagrees — a moratorium is still a type of ban prohibiting industrial development that is in the best interest of the state, a higher priority. The Colorado Oil and Gas Conservation Act, first passed in 1951 and regularly updated, helped form this idea when it created an overarching regulator for development of oil fields that transcend county and city lines.

Colorado has a long history of counties and cities trying to limit, ban or control oil and gas development, according to the July 24 order issued by Boulder County District Judge D.D. Mallard. La Plata, Gunnison and Summit counties, as well as the towns of Greeley, Frederick, Milliken and Black Hawk all have tried to impose local restrictions on oil and gas development to no avail.

All legal attempts to challenge the state's control would be moot if not for one point: "Colorado constitution does not address whether oil and gas activity should be regulated by state or local government," according to Mallard's order.

That leaves the window to local challenge open.

While local fracking restrictions might have a chance of standing on the state level, federal courts could still strike them down. Colorado's courts aren't the only ones sorting out fracking litigation; cases involving fracking bans are also working their way up the legal chain in New York and Pennsylvania.

Should any of those cases reach the U.S. Supreme Court, however, they could be seen as violating the U.S. Constitution, Laitos said.

Banning oil and gas activity of any kind — either temporarily or indefinitely — could violate a part of the Fifth Amendment prohibiting the "taking of private property."

If oil and gas activity stops — which some say would be the end result of new restrictions on fracking in Colorado — the repercussions would be felt beyond the industry, and possibly impact residents who sold mineral rights to companies, Laitos said.

For now, however, the battle for local control rages on, in the court system and out of it. But the outcome seems to be bleak for cities like Fort Collins.

"The news is bad for the Fort Collins law," Laitos said. "I mean really bad. I would be surprised if you have a different result from the Larimer County court."

What the law says

The Colorado Constitution does not expressly state that regulation of oil and gas development rests solely with the state. Instead, the state's regulatory authority over the industry is basically granted by two things: the Colorado Oil and Gas Conservation Act and something called "implied preemption."

Initially passed in 1951 and regularly updated, the act declares the need for the state to have a unifying regulator of oil and gas development, which transcends county and city limits. It is often referenced in past court cases granting the state power over municipal and county initiatives.

Nonetheless, cities like Fort Collins do have one legal loophole — the fact that exclusive state control over oil and gas is not explicitly stated in Colorado law. This leaves room for local initiatives like the Front Range fracking bans to take hold. While the Colorado Oil and Gas Conservation Commission's authority is implied and backed up by many legal precedents, its authority is not absolute.